Speech By Sir Michael Latham To ’Altogether Stronger’
Conference On 23 November 2004

It is very good that ConstructionSkills and SummitSkills have come together for this Conference today. Although my primary role today is as Chair of ConstructionSkills, I also have close and long standing links with the building services sector and greatly welcome the excellent relationship between the two SSCs. Partnership is the key to the success of the Sector Skills Councils. It is vital that we demonstrate our commitment to working together. I would also like to welcome warmly our colleague from Asset Skills – another of the Sector Skills Councils in the Skills for Business Network. We are also delighted to welcome clients and many representatives of the whole industry process.

This Conference allows me to reflect on the first year of ConstructionSkills’ existence, and to look ahead to the challenges which face us. This is a most exciting time for the industry. I’m not just referring to the business opportunities – strong though they are. Now we have the chance to overcome some of the problems which the industry has faced for too long. They include the need to secure sufficient recruits of the right calibre; to ensure that our existing workforce is trained to the necessary standard; and to help the industry improve its performance and productivity. Rising to these challenges will ensure that we achieve our ultimate goal – a world class UK construction industry.

As far as ConstructionSkills is concerned we have had an extremely productive first year. Notable achievements to date have been:

• Significant progress on a Sector Skills Agreement for construction.
• A raft of initiatives to raise awareness of construction careers to young people – from the Positive Image advertising campaign and the Creative Spaces school design competition to a very successful National Construction Week only last month.
• Our work to drive the diversity agenda. This year we have contributed to the Equal Opportunities Commission’s formal investigation into gender segregation in apprenticeships. We are now looking forward to implementing an action plan to address the investigation’s main findings
• The Built Environment Professional Services Skills Survey, which was published earlier this year by CIC, produced vital evidence which will underpin some of the key actions for the Sector Skills Agreement.
  • In Northern Ireland about 100 candidates achieved an NVQ through their 2003/04 pilot. The Department for Employment and Learning (DEL) have agreed to fund 30 candidates in the NI OSAT pilot in the 2004/05 training year.
• A Joint Working Group was set up to review construction craft Modern Apprenticeships framework and delivery in Northern Ireland. A model for delivery has been agreed in principle by CITBNI Board.

These achievements would not have been possible without the support that the partners in ConstructionSkills, CITB-ConstructionSkills, CIC and CITB NI, have had from the industry. We greatly welcome the input we have had from them all, and also from the organisations represented here today.

The entire industry can take pride in some of the achievements of this past year:

• The number of operatives holding a CSCS or affiliated card has passed the 600,000 mark
• More than 500,000 have now passed the health and safety test
• The OSAT programme continues to go from strength to strength, with more than 500 employees successfully completing their assessment/VQ at Terminal 5 alone
• And we’ve built safety into the design process with our Safety in Design competence standards.

But, as I said a moment ago, the challenges remain and these have been the focus of our first Sector Skills Agreement. It is an honour that ConstructionSkills was chosen to be a pathfinder for these agreements. The SSA gives us a real opportunity to draw together employers, educators and government agencies to deliver collaborative action plans which will provide workable solutions to these challenges.

First, there is the task of recruiting around half a million new entrants to the industry by 2010. This is a huge undertaking; and there is no simple solution. For the first time we are really beginning to make significant progress in positioning the construction industry as a career of choice for young people – especially at craft level.

We have succeeded in arousing widespread public interest. Now, we need to focus on attracting really high quality people. We want to recruit the brightest and best young people into this industry – across the board from craft to graduate. This year we also took the plunge into TV advertising and we challenged young people to consider if they were good enough to join the industry.

By raising the bar and introducing an element of self select into our campaign strategy, we are making it a more demanding industry to join; and we are really focusing on increasing the pool of quality recruits. In particular, we want to encourage more quality applications for construction-related degree courses in order to reverse a 40% decline in applications in recent years. I am delighted that we are now developing a collaborative initiative, covering the top contractors, house builders and professional consultancies, to promote the excellent professional opportunities across the industry. To attract attention from prospective undergraduates we are creating a £1 million pot (match funded by employers and Constructionskills) to sponsor those who choose construction related degree courses.

In 2003, the number of young people starting on construction related courses, across the UK, in further and higher education exceeded 61,000. However, inspiring potential new recruits is only half the battle. This challenge also involves finding enough work-based placements for these new entrants – at craft level, but also for technicians and graduate level entrants. The prevalence of self-employment restricts the number of apprenticeships that can be offered as entry routes for young people. Self-employment in the main craft trades averages 70% in London and the south east, where we would be lucky to place 1 or 2 apprentices per 100, whereas in Scotland and Northern England it would be 6 to 7 per 100. This dilemma is the subject of one of our discussion sessions later today, and we will benefit from your employer feedback.
Then there is the task of bringing around 250,000 employees already in the workforce up to N/SVQ Level 2 by 2010. Let no-one underestimate the scale of the task. It is therefore pleasing that there are some exciting developments to announce which will undoubtedly increase the momentum for this initiative. But I will keep you in suspense for now. We will hear more on that later from our Minister, Ivan Lewis, whom we are delighted is able to join us later, as also is Construction Minister, Nigel Griffiths.

And there is the challenge of improving overall performance of construction businesses. One of my pleasurable tasks this past year has been to award IiP certificates to many construction companies, often smaller ones, which have recognised the worth of the IiP approach. Their testimonies and achievements are inspiring; and we want to increase further the number of companies investing in training in this way.

On-the job training is central both to increasing an individual’s skills and raising the business performance of the company at all levels. So, through the Sector Skills Agreement, we are looking to expand Approved Training Schemes for graduates in their first jobs and create a Lifelong Learning Network for construction. This will help provide a clear progression structure, by which learners can achieve qualifications and also develop their skills and knowledge in the workplace and supply chains.

Working together to meet these challenges is what the Sector Skills Agreement is all about. It also gives us the means to articulate employers’ needs to government and to training providers as effectively as possible. The whole mission of a Sector Skills Council is to enable the voice of employers to be heard more clearly in identifying and then shaping skills requirements for the industry. Employers have been telling us what they see as the major issues facing the industry. Their wise advice is driving our Sector Skills Agreement, as we finalise our submission to government in the New Year.

Listening to what employers are telling us is vitally important. But it isn’t sufficient on its own. If we are to deliver the step change in training which the construction industry must achieve to remain competitive and to meet those three challenges, we must embed a new culture of training right throughout the supply chain. And that’s why I have been very heartened by the commitment that has been shown to what we are trying to achieve in this regard. It is commitment from clients, federations, professional institutions, trade unions, the major contractors, and the house builders. We have also achieved commitment for our plans from the government, both in Whitehall and the Devolved Administrations, in bodies such as English Heritage and the Environment Agency, and their equivalents in Scotland, Wales and Northern Ireland. That is very welcome.

But to be truly successful the SSA will need to secure further commitment from the suppliers and funders of training – Government and its agencies, colleges and universities. For example, we are looking for government to:

• provide sufficient funding for on-site assessment and training across the UK in order to achieve ‘employability’ at vocational level 2.
• provide funding for accelerated training and work experience for young people on full-time FE construction courses. Funding for adults should be at the same rate as 16-18 year olds, in order to encourage diversity. Our surveys clearly suggest that recruitment of women and Black and Asian people into our industry is more realistic with people who are older and more mature.
• Best Value procurement and create a “level playing field. Central and local Government funded construction contracts should require appropriate training and qualified workforces.
• Also, widen coverage of training provision for specialist occupations. Government funding should allow for higher unit costs.

It’s not just the whole of the industry we are now seeking to serve, but also the whole of the UK. We recognise the nuances of working in different parts of the UK – and rolling out good practice next year we will respect those differences.

The industry is a vital part of the UK economy, and a world-class UK construction sector is our essential objective. At our best, we are already very, very good. But if are to become consistent world-beaters, we need to overcome some of the challenges. Working together in partnership, as the industry is increasingly seeking to do, we can lay the foundations for a sustainable improvement in our competitiveness. That is good news for the industry, good news for generations of young people and good news for our country. We should be proud of our industry. It is creative. Its products outlive their creators. It is at the heart of our country’s prosperity and pride. Our industry has, quite literally, built Britain. That work continues. It will always continue. Our task is to provide and reinforce the skills and knowledge for those creators of the present and the future.